Few seats at the table

Smaller companies limit women's boardroom role most

NEW YORK (CBS.MW) -- Women looking for employers who value their perspective in top decision-making positions are more likely to find proof among the biggest U.S. companies, not their smaller counterparts.

Women hold 12.4 percent of all board seats at Fortune 500 companies this year, up from 11.7 percent last year, according to a new report from Catalyst, a New York research firm that advances women in business.

Yet they occupy 8.9 percent of seats in the Fortune 501 to 1000, an increase of less than a half a percentage point from 1999, when Catalyst first extended its census to the Fortune 1000.

"Many people think that as you go down the scale, the smaller the company, the more likely it is to have women represented," Catalyst president Sheila Wellington said. "That isn't so."

While Fortune 500 companies generally are improving their representation in the highest echelons, 13 percent still don't have any female board members.

At firms ranked 501 to 1000 by Fortune magazine, the dearth is three times as significant -- 39 percent of their boards are exclusively male, a figure's that barely budged in two years.

Protecting their images

Corporate giants know the world is watching and are quicker to make their governing bodies reflect the make-up of their talent base, said Judy Olian, dean of the Smeal College of Business at Pennsylvania State University.

"Undoubtedly, some companies change because of their sensitivity to public image," Olian said. "If you're protected and less visible, such as perhaps the (Fortune) 501 to 1000, it's easier not to change."

And change is needed most desperately for minority women, who make up 2.6 percent of board seats in the 409 companies for which racial breakdowns were available.

Women's numbers are advancing in both of Fortune's categories, but it will take females more than 20 years before they fill even a quarter of the overall seats, the survey said.

The top 10 companies

Women now comprise 47 percent of the U.S. workforce, but they still lack a voice in two highly compensated roles that drive the private sector economy: Board directors and corporate officers.

Board directors are elected to fulfill fiduciary and long-term planning responsibilities, as well as to hire and fire the chief executive officer. An average Fortune 500 firm has 12 board members.

Corporate officers, on the other hand, have companywide duties and the legal authority to speak for the whole firm. Companies with a high percentage of women board directors typically have a strong female presence among corporate officers as well.

Of the Fortune 1000 companies with the highest percentage of women directors, two are in New York, and only two have boards where the gender mix is at least evenly split.

The Catalyst list of top 10 companies for women board members includes:

For all the progress that's been made, more than a quarter of the nation's 1,000 largest companies still don't have a single woman on their boards. Among them are household names such as Bear Stearns, General Dynamics, Halliburton, Qwest Communications, Starwood Hotels, Allied Waste, United Auto Group, Harrah's Entertainment, and Oxford Health Plan.

Companies that make and sell toys, sporting goods, soap, computer and data services, office equipment, life and health insurance and apparel are most likely to have female representation.

Those in oil field services, transportation, automotive, semiconductor and electronic components, waste management, computer peripherals, mining and crude oil, and diversified wholesale are the least likely to have women board members, according to Catalyst.

Reflecting the labor pool

Companies that fail to promote women into leadership roles miss opportunities to hear from the people who make the most consumer spending decisions, Wellington said.

"Having one on the board is not enough to have a real culture change."
Judy Olian,Pennsylvania State University

What's more, firms with few or no high-ranking women risk alienating their female employees, many of whom track and can name those who've ascended, she said. "It's really important as a sense of inspiration. It sends a very powerful message to women employees."

Companies are especially wise to go beyond including one or two token females, which makes it easier for women to avoid be treated like a select group, Olian said.

"There's a critical mass issue that needs to be passed before you can have some real advances," she said. "Having one on the board is not enough to have a real culture change."

Another factor contributing to their absence is the type of work women are more likely to do. Climbing the corporate ladder requires them to be in springboard positions with executive or line management duties, jobs they tend to fill less often than men, Olian said.

Evolution and excuses

To be sure, women are no longer invited to join boards simply because they or their husbands are wealthy socialites, as was the case 30 years ago, Wellington said.

Companies now prefer entrepreneurs and businesswomen, as well as academics and former government workers, and hold them to the same standards as men.

Yet firms with no top women that say they have promising females in the pipeline don't have much to show for it, she said. "I know women whose mothers spent their entire careers in the pipeline."

For many women, the pace of progress toward equality in corporate decision-making seems glacial.

Said Olian: "I thought it would be much more pervasive in 2001, 37 years after the civil rights movement."

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